Question : Given that national income is Rs.100 crore and consumption expenditure is Rs.72 crore, When income rises to Rs. 200 crore and consumption expenditure to Rs. 108 crore, what will be the average propensity to consume at intial level.
Option 1: 0.28
Option 2: 0.72
Option 3: 0.33
Option 4: None of the above.

Question

Question : Given that national income is Rs.100 crore and consumption expenditure is Rs.72 crore, When income rises to Rs. 200 crore and consumption expenditure to Rs. 108 crore, what will be the average propensity to consume at intial level.

Option 1: 0.28

Option 2: 0.72

Option 3: 0.33

Option 4: None of the above.

Team Careers360 · Accepted Answer

Correct Answer: 0.72

Solution : $APC= \frac{Consumption}{Income}$

$APC= \frac{72}{100}$

$Hence, \, Option \, B \, is\, correct.$

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